CERAWeek - Video of the Week Listen in as Asher Bennett, Founder & CEO, Tevva Electric Trucks, discusses long-range… https://t.co/oA3VN4GvIY
New vehicle sales in South Korea grow 8.7% y/y in January
New vehicle sales in South Korea increased 8.7% year on year to 133,527 units in January, mainly due to solid performances by Hyundai, Kia, and SsangYong, as well as strong demand for imported passenger vehicles.
New vehicle sales in South Korea, including passenger vehicle imports, grew 8.7% year on year (y/y) during January to 133,527 units, up from 122,884 units in the same month of 2017, according to a report by the Yonhap News Agency, the Korean Automobile Importers' and Distributors' Association (KAIDA), and data compiled by IHS Markit.
Hyundai and Kia maintained their lead of the South Korean vehicle market in January with a combined share of 67.8%. Hyundai posted an increase of 14.0% y/y in its monthly sales to 51,426 units, while affiliate Kia's sales grew 11.7% y/y to 39,105 units. Sales of the third-largest domestic automaker, General Motors (GM) Korea, plunged 32.6% y/y to 7,844 units. SsangYong's sales during the month stood at 7,675 units, up by 9.4% y/y, while Renault Samsung's sales declined 14.0% y/y to 6,402 units.
Imported passenger vehicle sales grew by 8.7% y/y to 21,075 units in January, accounting for about 15.8% of new vehicle sales in the country. The three best-selling models during the month were the Mercedes-Benz E300 4MATIC, BMW 520d, and Mercedes-Benz E200 sedans.
Outlook and implications
The five South Korean automakers reported a combined marginal 0.4% y/y increase in global sales in January to 613,796 units, largely due to strong sales in the domestic market. The growth in the domestic market during the month came on the back of solid performances by Hyundai, Kia, and SsangYong in the domestic market, mainly thanks to new model launches and a low base of comparison. However, GM Korea and Renault Samsung felt the effects of a high base of comparison as the pair recovered in January 2017 from a low level of sales in 2016.
The surge in imported passenger vehicle sales during January was mainly thanks to a low base of comparison because of the ongoing stop-sell order on Audi and Volkswagen (VW) brand vehicles since August 2016, as well as increased supplies of popular brands and aggressive promotions. The stop-sell order triggered a 95.7% y/y slump in VW Group's light-vehicle sales in South Korea to just 1,245 units in 2017, according to data released by the KAIDA. Zero VW-brand vehicles were sold in the country last year, while Audi sales plunged 94.3% y/y to 962 units. The remaining 283 units came from the Bentley and Lamborghini brands. Meanwhile, Audi VW Korea restarted sales of three Bentley models in the country last year. It has also started sales of the new Bentley Bentayga sport utility vehicle (SUV) in South Korea. In November 2017, the group resumed sales of its Audi R8 sports car. The group has also started the sales of VW-brand vehicles from this month with the launch of next-generation Passat sedan. The automaker also plans to resume sales of the Arteon sedan and Tiguan SUV in the country this year. IHS Markit expects VW Group sales in South Korea to grow to around 46,000 units in 2018, with Audi sales at around 18,000 units and VW-brand sales at around 27,200 units. The group is also expected to start Skoda-brand sales in the country this year. By 2020, VW Group sales in South Korea are expected to reach around 77,000 units, split between VW-brand sales of 41,500 units and Audi sales of 33,900 units.
South Korean OEMs are banking on new models to bolster sales in their home market. They have either launched or plan to bring out a raft of new models in 2018. According to IHS Markit light-vehicle sales forecast data, around 65 new or refreshed models will be launched in the country this year. Hyundai is expected to further benefit from the vehicles launched last year such as the Genesis G70 and Kona. The automaker also plans to launch the Nexo fuel cell electric vehicle (FCEV) in March. Meanwhile, the new Stonic SUV and Stinger GT four-door fastback sedan, along with the recently launched facelifted version of the K7 sedan, will drive Kia's sales this year. The automaker also plans to launch the revamped K3 compact sedan with its next-generation powertrain in South Korea this month.
Renault Samsung has added a gasoline (petrol) variant of the QM6 SUV and a special edition of the QM3 SUV to its line-up. The automaker has also launched a refreshed version of the SM3 sedan and 2018-model-year SM3 ZE electric sedan with longer driving range. Renault Samsung also plans to launch the Clio compact car and Escape multi-purpose vehicle (MPV) in the country, while SsangYong will benefit from the G4 Rexton and G4 Rexton Eurasia launched last year. The automaker has also launched the upgraded Korando Turismo minivan and Rexton Sports pick-up. SsangYong aims to register 6.2% y/y sales growth in South Korea to 110,000 units in 2018.
In a bid to revive its sales in the South Korean market, GM Korea launched a diesel variant of the Chevrolet Cruze sedan in November 2017. It also plans to bring the mid-size Equinox SUV and full-size Traverse SUV to South Korea in a bid to regain market share. GM Korea will also develop new mobility technologies and businesses such as car- and electric vehicle (EV)-sharing services. It aims to sell 5,000 units of the Chevrolet Bolt EV in the country in 2018 on the back of growing demand for EVs in South Korea.
IHS Markit forecasts that light-vehicle sales in South Korea will come in at 1.78 million units in 2018, up 2.0% y/y from 2017 estimates of 1.75 million units. This will be split between passenger vehicle sales of 1.58 million units (up 2.2% y/y) and light commercial vehicle sales of 203,412 units (up 0.4% y/y). The country's new vehicle market will be driven by new model launches and the resumption of sales of VW Group's models in the country. The KAIDA forecasts that imported passenger vehicle sales in South Korea will grow to 256,000 units in 2018.
About this article
The above article is from AutoIntelligence Daily by IHS Markit. AutoIntelligence Daily provides same-day analysis of automotive news, events and trends. Get a free trial.
- Autonomous vehicle testing centre opens in Ohio
- Gaping gap between EV wireless and plug-in charging technologies
- New vehicle sales in Vietnam surge over 21 percent in first half of 2019
- Brazil launches local roadmap for EVs with German government
- Eleven companies publish guiding principles for self-driving vehicles
- Swedish light-vehicle registrations in June slump on high base
- US state Michigan unveils EV Charging Infrastructure Package
- China extends tax break for NEVs to 2020
An Automotive Minute - Episode 27 Listen in as Chris Hopson discusses US Light Vehicle Sales Volumes for the month… https://t.co/AofI08A3J7
Autonomous vehicle testing centre opens in Ohio. The Ohio state authorities (United States) have opened a 540-acre… https://t.co/Pq6tpj6mA8